L’Oréal adds Innovist to cart; HealthQuad's new fund

Happy Friday! Personal care giant L’Oréal has acquired a majority stake in Innovist in India’s biggest D2C deal. This and more in today’s ETtech Morning Dispatch.

Also in the letter:
■ IT’s new goldmine
■ Dhan's profit squeeze
■ AI talent beyond metros

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L’Oréal SA is snapping up a majority stake in Indian beauty startup Innovist — parent of science-led brands Bare Anatomy, Chemist at Play and Sunscoop — doubling down on one of the world’s fastest-growing personal care markets.

Deal details:

• Financial terms weren’t disclosed, but sources pegged Innovist's value at Rs 4,100 crore.
• Innovist’s founders will remain minority shareholders and continue to run day-to-day operations.
• L’Oréal also has a call option to buy the remaining stake at a later date.

Why this matters: The deal, the largest in India's direct-to-consumer (D2C) space, lands just as L’Oréal hits turbulence in India. Its India sales growth slowed to about 5% in FY25, down from 14% in FY24. New country manager Jacques Lebel has been tasked with reviving growth and grabbing share in a market where homegrown brands are coming on strong.

Investors make bank: Innovist founders and early backers are expected to rake in manifold gains from this deal.

• CEO Chawla is expected to earn around Rs 600-700 crore from the sale of a part of his stake.
• Sauce VC, which first backed Innovist in 2019, is set to make around Rs 450-500 crore in cash, translating to roughly an 8x return.
• Another early backer, OTP Ventures, may generate a 40x return on its initial investment.

About Innovist: Founded by Rohit Chawla, Sifat Khurana and Vimal Bhola, Innovist is one of India’s fastest-growing beauty startups, with ingredient-focused skincare and haircare brands sold across channels. It clocked revenue of Rs 301 crore in FY25 with net profit of Rs 12.5 crore.

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HealthQuad cofounder Sunil Thakur and partner Rahul Agarwal

Quadria-backed HealthQuad has raised Rs 550 crore for its third fund, targeting a Rs 1,700-crore corpus with a greenshoe option that could take it to Rs 2,500 crore. The healthcare VC firm has already written its first cheque from the fund into Lifesigns, an AI-powered remote patient monitoring platform.

What's the strategy:

• HealthQuad will back early-growth companies across healthtech, medtech, bio-pharma technology and new healthcare delivery models.
• Quadria will lean into more conventional healthcare assets such as hospitals, eye care, dialysis and pharma manufacturing, while HealthQuad will back new-age, technology-led models.

Tell me more:

• HealthQuad’s earlier funds backed Qure.ai, Wysa, Redcliffe Labs, THB, Ekincare, and Medikabazaar, among others.
• The new fundraising comes after the 2020-22 healthtech boom, a period when several digital healthcare models struggled with demand, clinical relevance, and unit economics once the Covid surge faded.
• HealthQuad partner Rahul Agarwal said the firm will back “clinical-grade AI”, while Sunil Thakur said it applies a private-equity lens to venture investing – a sharper filter after governance blowups across startups, including issues at Medikabazaar.

Circular economy and recycling startup Karo Sambhav has raised Rs 56 crore from Rainmatter, Zerodha’s investment and sustainability initiative.

Fund use: The Gurugram-based company will use the fresh capital to scale its recycling infrastructure to extract critical minerals, precious metals, and other high-value materials from discarded products, starting with electronic waste.

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Data centres and AI infrastructure are opening up a fresh growth frontier for India’s $315 billion IT services industry as the AI wave reshapes enterprise tech spending.

What’s happening? Software services firms have stepped up investments, acquisitions and partnerships around AI infrastructure in recent months. Industry experts say these moves could help them lock in deeper client relationships as budgets shift from generic compute to AI platforms, agents, and domain-specific applications.

For instance:

• HCLTech is investing Rs 1,427 crore ($150 million) to acquire a 10.46% stake in homegrown AI startup Sarvam, alongside other private investors.
• TCS and global asset manager TPG plan to jointly invest up to Rs 18,000 crore ($2 billion) in TCS’ AI data centre business, HyperVault.
• Cognizant is strengthening its AI infrastructure play with the $600 million acquisition of Astreya.

Quote, unquote: “Beyond the immediate revenue opportunity, these investments create strategic option value: as enterprise spending moves from compute and infrastructure towards AI platforms, agents and business applications, IT firms can leverage these early relationships to emerge as end-to-end partners of choice—an area that has traditionally been their forte,” said Somnath Chatterjee, founder and CEO of Prismforce.

Also Read: Rising AI adoption to drive $23 billion into India's data centres by 2030: Report

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Pravin Jadhav, founder, Raise Financial Services

Dhan parent Raise Securities’ FY26 earnings: Stock broking platform Dhan's parent Raise Securities reported a 14% year-on-year increase in net operating income to Rs 905 crore in FY26. However, the brokerage's profit after tax declined 20% to Rs 326 crore amid higher operating expenses and a tighter regulatory environment for derivatives trading, according to a ratings report by ICRA.

Bengaluru, Pune, Hyderabad, Mumbai and Chennai dominate India’s AI talent map: Report | Together, the five cities account for over a third of the country's AI workforce. However, the share of talent from outside these big metros is growing, the report added.

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■ 'We had to get out of the way': The backlash over delivery robots (BBC)

■ 3 Amazon workers say they’re under investigation for speaking out about data centers (Wired)

■ Chile turned to China for an undersea cable. The U.S. said no (Rest of World)